Mortgage prisoners

Interest-only and older mortgage borrowers have found themselves prisoners of their own mortgage lender. Borrowers in this category are turning to a second charge loan as a solid alternative to re-mortgage as a way of raising cash.

Figures show that there are currently over 2 million people with an interest only mortgage and the majority of those are over 50 years old.

Unfortunately, many of the interest only borrowers, who only pay the interest each month on their mortgage and no capital reduction, find themselves with a problem. Many banks and building societies are now insisting that any re-mortgage be converted to a repayment mortgage, meaning payment of interest and capital. This presents a problem to the more mature borrower as payments each month would increase significantly.

Second charge loan

A second charge loan – or second mortgage as they are known – works in the same way as a mortgage and is secured against your property. As the name suggests it comes second in line behind your existing mortgage deal.

Raising capital

If you need to raise funds without re-mortgaging now is a good time to review your situation as interest rates for second charge lending are at an all-time low. There is a very good selection of plans available from standard rate through to various fixed term deals. It is very important to remember this type of loan will NOT suit every case. It is vital to get expert professional advise as to the correct loan to meet your needs.

Help required?

If you would like to know more please call one of our fully qualified advisers who will be happy to assist.